Blockchain and the Growth of Digital Identity

The Internet is a part of our identity. Technological developments in the digital sphere have transformed every aspect of our lives, including shopping, working together with colleagues, staying in contact with friends, entertainment, and money management. Since the inception of the Internet, identity management has been a major issue, with billions of dollars being spent on usability, security, and anonymity. This some of the reasons why you need blockchain for digital identity. 

Inaccessibility 

Around 1.1 billion individuals worldwide lack identification, and among those who do not have a identification, 45% are among the poorest 20% of the world’s population. Over a billion people remain outside conventional identification systems due to onerous identification paperwork procedures, costs, access issues, and a simple lack of information about personal identity.  

With physical identities, it is possible to register for classes, submit employment applications, obtain passports, or use many government services. Access to the current banking system requires having an identity. On the other hand, 60% of the 2.7 billion unbanked individuals already own a mobile device, opening the door for blockchain-based mobile identity solutions that better meet the requirements of vulnerable citizens.  

Insecure Data 

Our most important identification data is currently kept in centralized government databases backed by outdated software and has many single points of failure. Hackers are very interested in large, centralized systems that hold millions of user accounts’ personally identifiable information (PII). According to recent research, 97% of all breaches in 2018 involved personally identifiable information, making it the most frequently targeted data. 2.8 billion consumer data records were exposed in 2018, costing an estimated $654 billion, despite regulatory legislation and corporate attempts to improve cybersecurity.  

Identity Theft 

To completely transform how users can profit from digital identity, the digital identity landscape requires more blockchain-based digital identity businesses. The IDs and passwords for websites allow users to manage multiple identities. In such situations, users lack a defined method for utilizing the data produced on one platform in programs on another platform.  

From another aspect, the limited connection between digital and real identities offers more freedom when fabricating identities. However, blockchain digital identity initiatives could use the technological advancements in cryptography to combat these problems. Blockchain can aid in the creation of new identity management systems with decentralized identifiers and digital identity structures. 

We now have the tools to create new identity management systems, including digital identity frameworks based on the idea of decentralized identifiers (DIDs), potentially including a new subset of decentralized identities known as self-sovereign identity (SSI), thanks to the increasing sophistication of smartphones, advancements in cryptography, and the introduction of blockchain technology. 

Summary 

You need blockchain for digital identity. In fact, digital identity itself is crucial when browsing the internet, and blockchain can make it more secure and protect valuable information and data. But it is a double-edged sword. The same reasons why you need digital identity can make a hacker’s job easier. Security and anonymous presence on the internet are rarely used responsibly. 

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